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Friday, January 27, 2012

Eric Schmidt's (blithe) answer to the jobs crisis

Yes, he acknowledged, many nations on Earth -- not least the United States -- are mired in a crisis of joblessness.

Technological advances such as automation on the factory floor have rendered millions of jobs obsolete, but they have also created millions of fresh ventures, while freeing workers toiling in antiquated industries to forge careers in higher-value pursuits. This is textbook creative destruction, the force celebrated by Joseph Schumpeter, the Austrian economist who is the intellectual touchstone for Silicon Valley....

...No one ought to blame Google, or any tech company, for job destruction in a moral sense. Automation is as old as capitalism, the natural outgrowth of the human impulse to extract greater harvest with less effort while saving the cost of paying other people to do what one cannot or do not care to do oneself.Labor sidelined by technology is a story not confined to the wealthy world. For Americans, a discussion of lost textile jobs conjures thoughts of laid-off mill workers in the Carolinas, with production shipped to factories in China. But China has lost more jobs in the sector than any nation on Earth -- the direct result of automation.

All of that said, Schmidt too blithely dismissed a problem with no easy answers, one at the center of the populist ferment now seething from Cairo to Columbus. In the United States, he suggested, unemployment is predominantly the result of inadequate skills among the workforce, a problem that could be addressed with better education.

Governments have to do something that's hard," he said. "They have to go back and invest in human capital. There are plenty of companies in the U.S. and other countries I've visited that are very short of highly skilled workers...."

...Yet too few Americans have gained a slice of the spoils, leaving too few able to consume enough to propel the economy. That limits demand for all sorts of workers -- from parking-lot attendants and short-order cooks to tax accountants and architects.

Fixing that will require something that the fabulously wealthy executives now here wandering the snow and cocktail circuit are too prone to oppose: making the tax code more progressive, thus enabling more people to enjoy the wealth derived from innovation.

You know my BS detector is starting to go off when I hear this "inadequate skills" line of reasoning.

What is he talking about? What specific jobs? We have let's say 10+ million people unemployed, do we "need" 10M "high skill" jobs like Schmidt is talking about? All throughout the whole geography of the US? NO I say.

Even Bernanke used this BS reasoning in his press conference this week, further poisoning the minds of congressional policymakers.

People in Schmidts position at Google use this BS as propaganda to help get HB-1 visas approved so they can import their Asian coolie labor.

It's the contemporary form of "human trafficking".

If we need 10M jobs and Schmidt here then comes up with a comment that perhaps identifies a shortage of "high skill" job applicants which even if you give him 250K of such jobs (which I think would be an over the top number) then HIS MATH DOESNT WORK.

Therefore it is a MORON statement.

Its like the questioner asked "Eric we need 10M jobs, how do we do it?"

Schmidt replies: "We have to educate people so we can fill 250k "high skill" openings" Whaaaaat?

Policy makers struggle with the idea that very many people are simply not going to be useful in a modern production system.

Yes, and they also sometimes suggest that things will improve only when everyone realizes she must be an entrepreneur. That's absurd. Only a minority of people can be entrepreneurs in any productive system based on the creation and destruction of large enterprises.

The basic line here is always, "Why can't those idiots be more like me! I'm an economist, and now I'm here having a ball in Davos, not standing on some unemployment line!"

It's a sort of "revenge of the nerds" phenomenon. The brainy people who run the world still hold a grudge against the jocks and toughs from high school. And now they are happy to tell them to stuff it.

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